Biotech Values

[DewDiligence]

Whom would you bet on, UCI or UCSD?

[Cortex Pharmaceuticals (COR) licensed its intellectual property from UC/Irvine, while new IPO Acadia Pharmaceuticals (ACAD) got its IP from UC/San Diego. The two companies aren’t exactly head-on competitors, but both are working in the CNS arena. COR is now one of my three largest holdings.]

http://www.signonsandiego.com/news/business/biotech/20040528-9999-1b28acadia.html

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First day of trading for Acadia disappoints

By Penni Crabtree
UNION-TRIBUNE STAFF WRITER
May 28, 2004

Acadia Pharmaceuticals had a disappointing public debut yesterday as shares fell 4 percent in their first day of trading on the Nasdaq.

The San Diego biotechnology company's lackluster stock performance came after Acadia had already slashed its pricing to $7 per share, from the $12 to $14 range it had estimated earlier. Acadia raised $35 million with its initial public offering. Shares of Acadia closed yesterday at $6.70, down 30 cents.

Acadia's experience is not a novel one among biotech companies. Underwriters for several IPOs have had to cut initial pricings in order to attract wary investors, and a general weakness in the stock market for already established companies hasn't helped build enthusiasm for new offerings, say some analysts.

Acadia is also involved in a difficult research area – Parkinson's disease – and hasn't generated enough data in early Phase 2 studies of its lead drug candidate to inspire much confidence, say some analysts.

"In the field of neurobiology, Phase 2 has been an absolute graveyard," said John McCamant, editor of the Berkeley-based Medical Technology Stock Letter. "Many things blow up in Phase 2 or Phase 3, and biotech really hasn't delivered much in this space."

Acadia is testing its lead drug, ACP-103, to treat side effects such as hallucinations and psychosis that are caused by other Parkinson's disease treatments.

An estimated 1.5 million Americans suffer from Parkinson's disease, a degenerative disorder that strikes the area of the brain that controls movement. Though medication can mask symptoms such as tremors, slowness of movement and balance problems, victims are eventually left unable to move, speak, or swallow.

ACP-103 is also being tested as a possible treatment for schizophrenia. Acadia has another experimental schizophrenia drug, ACP-104, that is expected to enter a Phase 2 trial this year.

Acadia has been around for more than a decade, first in Vermont in 1993 under the name Receptor Technologies. The company was renamed Acadia in 1997 and moved its headquarters to San Diego.

Acadia has 101 employees, 37 of whom work at the company's chemistry research facility near Copenhagen, Denmark.

The company has an accumulated loss of $75 million, with $14 million of that posted last year. Prior to the IPO, Acadia had about $22 million in cash.

Acadia was founded by Mark Brann, the company's president and chief scientific officer and an adjunct associate professor at the University of California San Diego.
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